'Special Report' Panel on Obama's Pending Decision and Health Care

This is a rush transcript of "Special Report With Bret Baier" from November 11, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS, U.S. CENTRAL COMMAND: I think that we are, indeed, ne aring a decision on this very important topic.

And I think it's very, very essential to recall why it is that we are in Afghanistan, and that is to ensure that that country does not once again become a sanctuary or safe haven for Al Qaeda and the kind of transnational extremists that carried are out the 9/11 attacks.

SEN. JOHN MCCAIN, R-ARIZ.: I feel very strongly that we owe it to the men and women in the military and the national security interests of the United States of America to have that decision made and made as soon as possible.

(END VI DEO CLIP)

BRET BAIER. HOST: Well, President Obama met with his national security team for the eighth time today in the situation room according to a senior official. The president and his team discussed the length of time it would take to implement the options he has been presented.

He believes, according to this official, that we need to make clear to the Afghan government that our commitment is not open-ended. After years of substantial investments by the American people, governance in Afghanistan must improve in a reasonable period of time to ensure a successful transition to our Afghan partner.

Resources were discussed, but contrary to reports, the president has not made a decision about the options he has been presented.

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: Eight meetings? Boy, that's a lot of meetings. It's about time for the president to decide. And I guess we will get a decision at the end of November when he gets back from his trip to Asia, after Thanksgiving. Is that what we expect?

BAIER: It could be before.

BARNES: It might be, but it will be two and a half months or three months after General McChrystal was ready. They made his recommendation of what needed to be done. They told him to hold off on the number of troops but the White House knew what it was. It was widely reported in the newspaper that he wanted 40,000 more troops, so that easy to figure out. And they're finally getting around to it.

Look, this delay matters, and it has constricted what General McChrystal can do in Afghanistan. You know, without an order to deploy that the president would have to give before troops at say, Fort Bragg would get ready to go and General McChrystal would know they are coming, there is only so much preparation he can do to get ready for the operations there. He is basically on hold.

And he is expected to produce real progress by next summer. That's what the White House wants. The longer the president delays and the fewer troops he sends, the harder that will be.

And then when you hear these complaints about Karzai and then again about the Pakistan government and so on that, gee, they may not be reliable. Of course they're not reliable. They will be more reliable in a safer situation if the Taliban is defeated or curbed and Al Qaeda is diminished, then they will be a lot safer.

When the surge in Iraq, we didn't know whether there was going to be any stable government at end of the line. But when you create security, one tends to develop.

BAIER: A.B. what about this statement by the senior administration official talking about this meeting, the focus on the Afghan government, the commitment is not open-ended, that the investments in the Afghan security forces need to be a commitment of governance over a reasonable period of time?

I mean, they went out of their way to detail this part of the statement.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: What we're hearing from the White House is that, a, the president is not happy with his choices, and the question that Fred raised about strong partners was answered a long time ago, strong partners in Pakistan and Afghanistan. They knew that a long time ago before the August 20 election in Afghanistan, et cetera. Right now the emphasis that the White House keeps making is not on troop levels. They want us to know it will be on the strategy that accompanies the level of increase in troops. And so they are trying to de-emphasize the question of resources and emphasize a strategy.

What they want is an end game, and they really can't find one. If they say the terms are how we bolster the Afghan army and Afghan police force to a point where we can hand off this mission to them and leave, that is not going to happen soon enough in terms he can define to us right now.

Obama is getting ready to do something he is not used to doing and doesn’t like doing, and which is sell something other than himself. He has never done that well at health care, a top priority.

He has kept at an arm's length distance all these months, and he is ambivalent and has to get out and really sell this to the American public. And you can tell he's not ready.

BAIER: Charles, do you think he can sell it, especially since this is his second bite at this apple, as we have talked about many times. The first rollout of this strategy happened in March.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: He has to sell it, and I think the delay has made his task a lot harder. The delay has put our allies in some doubt.

That's not just the NATO allies, Canadians and others who are talking about withdrawing in a couple of years. It is the Afghans who have chosen our side and have to wonder that in the end will the United States withdraw and leave them hanging.

And the other uncertainty is about Obama's commitment himself. The issue is if he takes this long, and if he gives all these excuses, which you talked about just a moment ago, about how we may not have a partner in Afghanistan, we may not have a partner in Pakistan, you're expressing doubts about our allies in the region, and you're implying that somehow this is a kind social work that the reason that we at war is to bolster these allies.

It's protection of the American homeland. It's what Petraeus had talked about, keeping out Al Qaeda and preventing the regrouping of Al Qaeda and their allies. It's our war, and it's in the name of our security.

If the president expresses all of this uncertainty and takes this long in agonizing, you got to wonder, is his heart in it? He has to make a speech after his decision to demonstrate that he really is committed to success in this, because all of this delay and these excuses about Afghan/Pakistani partners gives the impression of an administration that will be looking for an excuse of a certain point of withdrawing or pulling back.

BAIER: Fred, National Security Adviser James Jones was quoted in a German magazine, Der Spiegel, saying, "It doesn't matter if you put 200,000 troops in, Afghanistan will still eat them up as it has in the past."

The White House says he was talking about the link between civilian and military to be able to solve the problem. But that quote was pretty stunning, and he spoke out publicly like General McChrystal was slapped down for doing.

BARNES: And then of course last summer when he took Bob Woodward to Afghanistan with him and told the generals over there don't ask for troops. Not there's a man that doesn't want the U.S. to be involved in Afghanistan and he's the national security advisor. Obviously, 200,000 troops would make a huge difference there.

I think the other problem that President Obama has is the political problem. This war has become unpopular, particularly among Democrats, particularly among the base of Democratic liberals who support Obama, and it's hard to move against them.

He would have to do something like President Bush did on the surge when practically nobody was in favor of that, public opinion, Congress, most Republicans, Democrats, his own State Department, his own Joint Chiefs of Staff were against it.

And the president did it. It did not make him more popular. It did not help Republicans running for office. But it did win the war in Iraq, which is the most important thing.

BAIER: A.B., last word, do you think we get a decision before Thanksgiving?

STODDARD: I have a feeling they want to get it out there. It becomes more troubling after Thanksgiving.

And I just want to say, I'm not surprised he has taken this long, because he did not want to be accused of a rush to judgment which he accused President Bush of and blamed him for. But I'm surprised they are letting this out that he's not happy with his choices. That, to me, has been the most surprising message.

BAIER: Next up, a look at legislation that could create a new bureaucracy, regulating the financial industry. The panel weighs in after we pay some bills.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD, D-CONN., SENATE BANKING COMMITTEE CHAIRMAN: I'm unveiling a sweeping, bold, long overdue comprehensive financial reform package of legislation. This proposal will create a new architecture to make our financial institutions more transparent, more responsible, and more accountable to the American people.

MITCH MCCONNELL, R-KY., SENATE MINORITY LEADER: What I understand is this is yet another 1,000-page bill not supported by any Republicans. I don't think the public is clamoring for us to pass yet another 1,000-page bill.

(END VIDEO CLIP)

BAIER: Senator Chris Dodd, the chairman of the Senate banking committee, unveiled this huge new bill about overhauling the banking and financial services sector.

The most controversial aspect of this is to strip the Federal Reserve and the FDIC of the powers over the nation's large banks and put them in a new bureaucracy, something that the House and the White House are opposed to. We're back with the panel — A.B.?

STODDARD: I think if you look at the health care debate in its entirety and especially since the elections last week, you look at the analysis of what's going to happen to health care after the house bill, there is no appetite in the Congress for anything sweeping in the remainder of this year or in 2010.

We're going to be looking at finishing up this health care situation if it passes at all. And Bill Clinton is wrong. They are not necessarily winning at this point.

Then to move to something like this, which is so aggressive and so ambitious, I mean, Senator Dodd's bill, much more so than the House, is, again, it's not — it's just not realistic.

That's why the White House, which is in disagreement with Senator Dodd over many aspects of this bill, is taking the long view and saying this is a great beginning, because it is so far down the road, it will change so much.

I think for Senator Dodd, very vulnerable incumbent facing a very tough election next year, along with many other democrats, facing bailout anger, anti-Wall Street and anti- Fed sentiment at record highs in the population and rising. It's probably a win-win, because he proposed it, and then you move on from there.

BAIER: Dealing with his own personal vulnerabilities. Charles?

KRAUTHAMMER: The bill is only a show horse, meant for a political protection for Senator Dodd.

But look, the bill in and of itself is terrible. An axiom of politics is that members of Congress want to control stuff and liberal members of Congress want to control everything. That's why they don't like the Fed. It's independent.

Now, you can't take it over, but you can, as the Dodd bill attempts to do, you cut it down, you restrict it, you make it small. You weaken it, and you, and as the bill indicates here, you remove the regulation of the financial institutions.

Presumably this will prevent another meltdown. The problem is this — the British have today the exact system that Dodd wants, a separation of the bank of England and the regulators of the financial institutions. The meltdown in Britain was much worse than in the United States.

And one of the reasons is because if you disperse power, you disperse information, the head of that regulatory agency doesn't have the information that the Bank of England has, and as a result they had a much worse result.

The economists in Britain are advocating undoing the separation of the Bank of England and the bureaucracy as a way to save the British economy in the future, exactly the reverse of what Dodd wants to do.

BAIER: Fred, the Federal Reserve does not have a lot of friends up on Capitol Hill right now. The left is attacking it, the right is attacking it.

BARNES: Right. I'm not sure about the middle, either. It doesn't have many friends.

But look, one, it is going to handle monetary policy, and two, it needs some banking regulations — regulatory power there, because what is the vehicle through which it runs? It's monetary policy, it's through the banks. So you can't just say when you do monetary policy but you can't have anything else to do with the banks, that doesn't make sense.

The problem with this bill is, one — well, there are lots of problems, but the biggest one is what it doesn't do and what the American people want the most, and that is to get rid of any financial institution that is too big to fail that we may have to bail out at some point.

BAIER: Although Senator Dodd says he will get rid of that. He claims that it's in that bill.

BARNES: No, it's not in that bill, though. What you have to do is what happened to Standard Oil and all those trusts and AT&T. You break them up because they're too big. And they can certainly do that with banks and other financial institutions.

Paul Volcker is for that. Henry Kaufmann wrote a terrific piece about this in The Wall street Journal today.

That's what you do so you don't have this situation where there will ever have to be a bailout again. You can tell Citicorp you can chop off some of the things they do and other banks do.

And this is what people want. They want no more bailouts. And the way you have no more bailouts is you have no institutions that are too big to fail.

BAIER: Quickly, A.B., this sweeping overhaul probably doesn't have a chance, but what about regulatory legislation, like from Barney Frank?

STODDARD: I do think it is a signature goal of the administration. They want to be able to go to the voters with something to address all this anger about bailouts, intrusions to the private sector, anti-Wall Street, anti-Fed. I think that they do want to go to the electorate and say we did something to protect consumers.

If you look at how much business contributions have tanked the Democrats this year, I don't think it is going to be sweeping.

BAIER: That is it for the panel.

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